Canada Budget Preview: Budget Likely to Give Trade a Nod

The Canadian government will likely push its agenda to open up new markets to Canadian goods and services in today’s budget–even as it struggles to close a key trade pact with the European Union.

Ottawa is banking on trade to create jobs and growth as the domestic economy slows. So how does a government that’s reining in its finances serve its pro-trade agenda? Probably by freshening up an existing plan to seek new markets and shifting around money that’s already been allocated.

In the 2012 budget, Ottawa said it would unveil this year a refreshed version of its so-called Global Commerce Strategy of 2007.

“They will want to do a standalone announcement on it, probably a little bit later, [but] I’m expecting to get at least broad strokes of what it’s going to look like” in the 2013 budget, an industry source told Canada Real Time. The plan was updated on the basis there wouldn’t be new money going in, so it’s more likely to entail re-jigging internal funding to match priorities, the source said.

Thursday’s budget document is likely to reiterate how Ottawa is pursuing free-trade agreements with a number of countries, including most that were listed as new-market opportunities last year: the European Union, Japan, India and the Trans-Pacific Partnership, a U.S.-led group negotiating a free-trade zone spanning the Pacific Ocean.

So far, it’s proven to be an uphill task. Ottawa has yet to close a deal with the EU after more than three years of negotiations. The talks have entered the final stretch, but a handful of outstanding issues, including Canada’s demand for greater market access for beef–are proving to be particularly sticky, according to people familiar with the talks. And pressure on the government to close the deal has ramped up after the U.S. and the EU said last month they would launch negotiations for a trade pact.

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Canada Real Time provides insight and analysis into what’s making news in Canada, a country punching above its weight on the world stage thanks to its vast resources and strong banking sector. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, we take a look at developments in fields ranging from business to politics to culture. You can contact the editors at canadaeditors@dowjones.com